What's going on?
Tyson Foods reported better-than-expected quarterly results on Monday, as the US meatpacker charges Americans an arm, a leg, and a trotter or two for their weekly shop.
What does this mean?
Tyson might not be the most glamorous of companies, but America’s shoppers need what it’s selling: everyone’s gotta eat, after all. And you have been hungry: Tyson sold its products for 20% more on average last quarter than the same time in 2020, and it still managed to sell the same amount (tweet this). That pushed its operating profit – which excludes interest payments and taxes – up 40%. Tyson’s not just making money either: the company’s on track to save as much as $400 million this year. Throw in a better-than-expected sales outlook for this year, and investors were sold: they sent Tyson’s stock up 5%.
Why should I care?
Zooming in: The US vs Tyson.
The US government probably isn’t so happy, given that it sees Tyson as one of a small group of meatpackers that holds too much power over prices. In fact, it released a study in December showing that Tyson and three other major producers had increased their combined profits by 500% since the start of the pandemic. That might be why the government announced last month that it’ll be spending $1 billion on funding smaller firms, which should promote competition in the industry and ultimately bring down prices.
The bigger picture: Buh-bye, Beyond Meat.
Tyson’s reign doesn’t look like it’s under threat from Beyond Meat either: Dunkin’ recently ditched the plant-based company’s food from its menu, and TGI Fridays said it won’t be adding any more of its products. This, despite the fact they were two of the earliest companies to jump on the meat-substitute trend. Some analysts think that’s a sign of things to come, and that fast food chains like McDonald’s and KFC – which have only boarded this bandwagon recently – will eventually follow suit.